Item 19 Staff Report Consider Contributing Funds to Housing Trust Fund of Santa Clara County for Affordable HousingDATE:
TO:
MEETING DATE: 9/5/00
ITEM NO.
JOINT COUNCIL/ AGENCY AGENDA REPORT
August 31, 2000
MAYOR AND TOWN COUNCIL
CHAIR AND MEMBERS OF THE REDEVELOPME / AGE► CY
FROM: TOWN MANAGER/ EXECUTIVE DIREC
SUBJECT: CONSIDER CONTRIBUTING FUNDS TO HOUSING TRUST FUND OF SANTA CLARA
COUNTY FOR AFFORDABLE HOUSING
RECOMMENDATION:
Consider contributing funds to Housing Trust Fund of Santa Clara County for affordable housing.
BACKGROUND:
The Housing Trust Fund of Santa Clara County (HTF) is a public/private partnership, dedicated to building and
sustaining a revolving loan fund and grant making program that will complement and leverage other housing resources
throughout Silicon Valley. Major community, business and government leaders have joined together to address the gap
between rapid new job creation and affordable, available housing within Santa Clara County. The HTF is made up of
a consortium of sponsors including Silicon Valley Manufacturing Group, Community Foundation Silicon Valley,
American Electronics Association, Santa Clara County Board of Supervisors, and The Santa Clara County Collaborative
on Housing and Homelessness.
Carl Guardino, President and CEO of Silicon Valley Manufacturing Group has approached the Town about making a
financial contribution to the HTF. Attachment 1 is a letter from Mr. Guardino which provides general background
information and Attachment 2 is a copy of the HTF internet home page and frequently asked questions which provides
additional background information. Mr. Guardino and Santa Clara County Supervisor Don Gage are planning to attend
the September 5, 2000 meeting to discuss this matter and answer questions.
DISCUSSION:
There are two Town funds that are established to finance affordable housing projects. The first is the Town's Below
Market Price Fund (BMP) which receives funds through development in -lieu fees. The second is the Redevelopment
Housing Set -Aside Fund (HSA) which receives 20% of the property tax increment revenue. The purpose of the HSA
fund is to provide affordable housing in the redevelopment project area. Currently, both funding sources have revenues
that may be used to provide a contribution to the Housing Trust Fund.
Housing Set -Aside Funds:
There are three primary issues to consider in determining what to do with HSA funds: 1) when they must be spent, 2)
where should the projects be located, and 3) worthiness of the projects.
(Continued on Page 2)
PREPARED BY: PAUL L. CURTIS
COMMUNITY DEVED(JPMENT DIRECTOR/REDEVELOPMENT DEPUTY DIRECTOR
Reviewed by: Attorney
Finance
Revised: 8/31 /00 1:46 pm
Reformatted: 10/23/95
PAGE 2
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: CONSIDER CONTRIBUTING FUNDS TO HOUSING TRUST FUND OF SANTA CLARA
COUNTY FOR AFFORDABLE HOUSING
August 31, 2000
1) It is important to note that the Agency is obligated to expend the resources in the HSA in a timely manner to avoid
amassing "excess surplus." The legislature has defined "excess surplus" to mean an unexpended and unencumbered
amount in the HSA that exceeds the greater of $1 million or the total amount deposited in the HSA during the preceding
four years. Staff estimates that the current HSA fund balance is approximately $777,000 and that the "excess
surplus" will not be affected for a minimum of 5 years. In short, while there are time constraints in the use of
redevelopment set -aside funds, it is not critical that the funds be spent or encumbered in the very near future.
2) Redevelopment set -aside funds must be spent on projects within the redevelopment project area to receive "full credit"
for housing programs. Redevelopment law requires that 15% of the total number of units built in the project area be low
and moderate income units. If HSA funds are used for projects outside the project area, the Town only receives credit
for half of the unit count. Specific sites have not been "pre -selected" and any housing projects will be reviewed on a case
by case basis.
3) When projects are proposed, they will be evaluated on a case by case basis as part of the development review process
currently used in all project analyses. At that time, the worthiness of the project will be determined dependant upon
location, design, neighborhood compatibility, etc.
BMP Funds:
BMP funds can be used for projects located anywhere in the Town. These funds are collected as in -lieu fees when
project developments do not provide BMP units within the project itself. This revenue source provides a means of
"banking" larger amounts of funds to provide incentives to building affordable projects.
HOUSING TRUST FUND PROPOSAL:
Town staff has discussed the possibility of contributing funds to HTF with representatives of the Silicon Valley
Manufacturing Group. Staff strongly recommends that any funds contributed by the Town result in housing that satisfies
both the Town's BMP and HSA standards and regulations. In addition, HTF should provide matching funds on a one -
for -one basis and agree to leverage the Town and HTF funds on a ten -to -one basis. For example, if the Town provides
a contribution of $125,000 from the BMP Fund and $125,000 from the HSA Fund ($250,000 contribution), the HTF
will match that amount for a total of $500,000. If that amount is leveraged at ten -to -one, there will be $5 million
available for an affordable housing project. Staffs opinion is that the $5 million amount is a minimum to reasonably
fund a project.
If the Council/Agency agrees with the concept of pooling Town resources with HTF, it should direct staff to prepare a
Memorandum of Understanding (MOU) that sets forth the terms of this program. The MOU will include numerous
provisions to protect the Town's interest including time limits, how interest on the Town's contribution will accrue and
what type of housing project will be eligible and where the project must be located. The draft MOU will be scheduled
for Council/Agency consideration before it is executed so that any suggested changes may be incorporated.
FISCAL IMPACT:
None. The fiscal impact of the Town/Agency contribution to the Housing Trust of Santa Clara County will be evaluated
in a subsequent report when the draft Memorandum of Understanding is presented for consideration..
PAGE 3
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: CONSIDER CONTRIBUTING FUNDS TO HOUSING TRUST FUND OF SANTA CLARA
COUNTY FOR AFFORDABLE HOUSING
August 31, 2000
Attachments:
1. Letter dated August 21, 2000 from Carl Guardino, President and CEO, Silicon Valley Manufacturing Group
2. Copy of Housing Trust Fund of Santa Clara County internet home page and frequently asked questions
Distribution:
Mr. Carl Guardino, President and CEO, Silicon Valley Manufacturing Group, 226 Airport Parkway, Suite 190, San
Jose, CA 95110
Mr. Don Gage, Santa Clara County Board of Supervisors, 70 West Hedding Street, San Jose, CA 95110
PLC:BL:mdc
N:1DE V 1Cnclrpts\Housing
i
FROM : SILICON VALLEY MANUFACTURING FAX NO. : 5017861
Aug. 21 2000 12:06PM P2
JY�y
M�n p turin8
226 Airport Parkway, Suite 190
San Jose, Calllornia 95110
(408)501-SVMG (7864) Fax (408)501-7861
hf7ghiewwsvrmg.org
CARL GUARDINO
President 8 CEO
BOARD OF DIRECTORS
DAVID WRIGHT
Chairman
Amdahl Corporation
JAMES N, WOODY, M.D., Ph.D
Vice Chafr
Roche Pal Alto
JOHN A. CONOVER
Secretaryareasurer
Bank of Amth
CRAIG R. BARRETT
Intel Corporation
ROBERT CARET
San Jose State University
JOHN C. DEAN
Silicon VerIey Bank
HART J. DE GEUS
Synopays
PAPKEN S. DER TOROSSIAN
Silicon Valley Group. Inc.
TED GAVRILIS
Lockheed.MeRM, Commercial Space Systems
M.R.C, GREENWOOD
University of Callfornla. Santa Cruz
BRIAN kALLA
National Semiconductor
ELLEN HANCOCK
Exodus Communications
JAY T. HARRIS
Sea Jose Mercury News
RICHARD KASHNOW
ryco Raychem
RICK KNISS
Agilent Technologies, Inc.
GLENN LARNERD
IBM Carpo+ydun
DEBORAH NEFF
tlecton Dickinson
KO NISHIMURA
SokCtron Corpoielion
LEN PERHAM
Craer Logic
ARTHUR L. ROBERTS
United Defense LP
ROBERT SHOFFNER
CITIBANK
GORDON SMITH
PG&E.
JOHN STEWART
Gamete/ Dyrwmics Electronics Systems
JOYCE M. TAYLOR
Pacific Bull
HELEN WILMOT
eHealthcontrects
JOHN WOODS
TRW
JOANN ZIMMERMAN
Keiser Pbmtdnanto
Working Council Chair
ROBERT C. SHERRARD
Mid-Penineuio Bank
Founded In 7977 by
DAVID PACKARD
August 21, 2000
Honorable Steven Blanton
and Members of the Town Council
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95031
Dear Mayor Blanton and Members of the Town Council;
We are delighted to hear that the Town of Los Gatos is considering a
contribution to the Housing Trust of Santa Clara County.
As you may know, just 11 months into what was originally envisioned as a 24-
month campaign, the Housing Trust has raised more than half of its $20 million
goal. As of today, the Trust has received approximately $12 million dollars and is
wrapping up commitments equal to $14 million in next 30 days. A list of
investors, from the public and private sectors, is attached. The Trust is unique
among the 150 trust funds currently in operation around the nation in that it is
being funded through voluntary donations, rather than new taxes or fees, and
nearly two-thirds of its funding has come from the private sector.
The fund will serve three purposes on an equal basis: loans to first-time home -
buyers, gap financing for affordable housing developers, and grants to
organizations providing services to those who are homeless or near -homeless.
The fund will leverage public and private funds at a ten -to -one ratio.
Consequently, the potential return on this $20 million investment is $200 million.
We understand that Los Gatos would like to see its contribution spent to
increase the supply of housing and homeownership opportunities in its
community, possibly within its redevelopment district. We would be delighted to
honor that request. We could accomplish this through a Memoradum of
Understanding (MOU). The MOU would stipulate where and how you would like
your funds to be used, and which funding source you feel would best serve the
needs of your community.
Thank you for considering participating in this important effort, I look forward to
answering any questions you might have.
Sincerely,
arl Guardino
President & CEO
Attachment 1
FROM : SILICON UALLEY MANUFACTURING FAX NO. : 5017861 Aug. 21 2000 12:06PM P3
Silicon
Manufacturing
Group
226 Airport Parkway, Suite 790
Sen Jost), CaUlornla 95110
(408)501•SVMG (7864) Fax (408)501-7861
hilpArtww,svm0.arg
CARL GUARDINO
President & CEO
BOARD OF DIRECTORS
DAVID WRIGHT
Chairman
Amdahl Corporation
JAMES N. WOODY, M.D., Ph.O
Vice Chair
Roche Palo Apo
JOHN A. CONOVER
Sec etaryfrrousurw
Bank of America
CRAIG R. BARRETT
Into; Conocret an
.ROBERT CARET
San Jose State University
JOHN C. DEAN
SNk on Valley Bank
HART J. DE GEUS
Synopses
PAPKEN S. DER TOROSSIAN
Silicon Valley Group, Inc.
TED GAVRILIS
Lockheed -Martin, Commercial Space Systems
M.R.C. GREENWOOD
University of California, Senior Cruz
BRIAN HALLA
Nailonel Sagicandt,ctor
ELLEN HANCOCK
Exodus Communications
JAY T. HARRIS
San Josh Mercury News
RICHARD KASHNOW
Tyco Raychem
RICK KNISS
Agilent Technologies, Inc,
GLENN LARNERD
IBM Cdparatlon
DEBORAH NEFF
Becton Dickinson
KO NISHIMURA
Solecvon Corporation
LEN PERHAM
Clear Look
ARTHUR L. ROBERTS
Linked Defense LP
ROBERT SHOFFNER
CITIBANK
GORDON SMITH
PG&E
JOHN STEWART
General Dynamics Electronics Systems
JOYCE M.TAYLOR
Peclnc Be11
HELEN WILMOT
eHeakhconkacis
JOHN WOODS
TRW
JOANN ZIMMERMAN
Kaiser Parmanante
Working Council Chair
ROBERT C. SHERRARD
Mid -Peninsula Bank
Founded In 1977 by
DAVID PACKARD
HOUSING TRUST
Donors to Date
(as of 7-20-2000)
PRIVATE SECTOR
Adobe - $1 million
Applied Materials - $1 million
Cisco Systems - $1 million
Intel - $1 million
Hewlett Packard - $1 million
Knight Ridder/SJ Mercury - $1 million
The Valley Foundation - $500,000
Kaufman and Broad - $200,000
Norte] Networks - $200,000
Solectron - $200,000
Mid -Peninsula Bank - $100,000
SJ Real Estate Board - $50,000
EOnline - $10,000
S.CI. Co. Farm Bureau - $10,000
NextLlnk - $2,500
Silicon Valley Manufacturing Group - $1,800
PUBLIC SECTOR
S,CI. County - $2.5 million
San Jose - $1 million
Milpitas - $500,000
Santa Clara - $250,000
Sunnyvale - $500,000
Subtotal - Private: $7,274,300 Subtotal - public - $4.5 million
Total to Date: $11,774,300
Housing Trust Fund of Santp Clara County
Page 1 of 2
Overview
General information
News Releases
FAQ
Contact tiff
Steering Committee
t-i7F Participants
Progress Meter
Useful finks
Housing Trus and of Santa Clara County
— Our Vision
Rising housing costs and decreasing
availability are adversely affecting the
quality of life in Santa Clara County,
the heart of the Silicon Valley.
Affordable housing is integral to
economic well being, job recruitment
and talent retention, and is directly
linked to the region's two other major
issues - transportation and education.
Housing creates jobs, boosts local tax
revenues and enables our community
to be a vibrant place to live, work, and conduct business.
The Housing Trust Fund of Santa Clara County (HTF) is a catalyst to
develop specific, desperately needed housing in Santa Clara County
through an innovative blend of corporate and community investors.
The HTF will feature three tiers in its program:
• Low -interest down payment/closing cost loans for first time
homebuyers
• Gap financing for affordable rental housing projects
• Funds to assist the homeless in attaining stable housing
The HTF is action on the housing crisis. Our strategies will turn each
dollar raised into an investment ten -fold in value. And we are doing it
now.
The Housing Trust Fund (HTF) is a public/private partnership,
dedicated to building and sustaining a revolving loan fund and grant
making program that will complement and leverage other housing
resources throughout Silicon Valley. Major community, business and
government leaders have joined together to address the gap between rapid
new job creation and affordable, available housing within Santa Clara
County.
The consortium includes:
The Silicon Valley Manufacturing Group (SVMG)
Community Foundation Silicon Valley (CFSV)
American Electronics Association (AEA)
http://www.housingtrustfund.org/
Attachment 2
Housing Trust Fund of Santa Clara County Page 2 of 2
Santa Clara County Board of Supervisors
The Santa Clara County Collaborative on Housing and
Homelessness
[ Please see our Steering Committee and HTF Participants pages for a
complete list of our supporters. ]
A Back to Top f
The Housing Trust Fund of Santa Clara County
Investing in our Community with Vision, Compassion and Innovation
60 South Market Street, 10th Floor
San Jose, CA 95113-2336
Gisela B. Bushey
Project Director
Tel: 408/278-2215
Fax: 408/278-0280
E-mail: gbushey@cfsv.org
[Overview][General Information] [News Releases][FAQ][Contact HTF]
[Steering Committee][HTF Participants][Progress Meter][Useful Links]
This site hosted try
WebCom
Site Design
by
MEDIA CONCEPTS GROUP
http://www.housingtrustfund.org/ 8/22/2000
• Frequently Asked Questions.
Page 1 of 4
Overview
General information
News Releases
FAQ
Contact tifF
Steering Committee
HTF Participants
f regress Mefer
Useful Links
Investing in our Community with Vision , Compassion and .Innovation
Housing Trust Fund of Santa Clara County
— Frequently Asked Questions
Q. How Will Funds Be Administered?
rAmin HTF
'i home
A. The Community Foundation Silicon Valley, the region's largest and
most respected grant making institution, is one of the program's primary
partners, providing fiscal oversight along with technical and
administrative support. An HTF Steering Committee comprised of
prominent business people, public officials, and community leaders has
provided leadership and vision to create the HTF. They oversee the
program.
A Loan Fund Administrator that specializes in affordable housing loan
programs will review and make recommendations to the HTF concerning
first-time homebuyer loans and affordable housing project loans. The
grant making component will be performed in conjunction with the
Community Foundation Silicon Valley.
Q. Who Will Be Eligible?
A. Eligibility requirements for use of funds have been drawn by a senior
Technical Advisory Committee and three Subcommittees. The committee
will make final recommendations on lending and administrative
guidelines, utilizing relevant experiences of similar programs elsewhere.
The group includes experts in affordable housing development, finance,
and major HTF investors.
36 homes for rent
or purchase by
low-income
families
Q. How Are Funds Replenished and Grown?
A. In its first stages the fund is replenished through loan repayment and
http://www.housingtrustfund.org/faq.html
8/22/2000
- • Frequently Asked Question
n
Page 2 of 4
supplemental grant making from foundations, corporations, and public
sector fenders. Subsequently, Housing Trust Funds will actually expand
through future bond measures and the linkage of commercial development
with housing requirements.
Q. Aren't There Plenty of Other Programs Doing Affordable
Housing?
A. The HTF creates housing opportunities for broader markets by
complementing and filling gaps with existing affordable housing
initiatives.
• HTF promotes home ownership as an essential component of a
family's ability to succeed economically and socially, even for
middle income households.
• Most programs focus on the homeless and multi -family affordable
housing or on single family end -loans. The HTF works directly
with developers in all types of housing.
• The HTF will often serve as "last money in," enabling developers
to complete their complex funding packages.
• Complex restrictions encumber many loan programs. HTF will lend
to innovative yet responsible programs if they meet an unmet need.
• No other program contains the level of public/private partnership as
the HTF.
Q. What is the Track Record of Housing Trust Funds?
A. While innovation will be a hallmark of the HTF of Santa Clara
County, the program is built upon the collective experience of housing
trust funds elsewhere.
There are over 150 housing trust funds across the United States. ten of
them in California alone.
The San Diego HTF, for example, began as a $20 million venture and
started the production of over 1,800 units of housing in its first 30 months.
Local business leaders credit the program with keeping jobs in San Diego
where, like the Bay Area, housing pressures were undermining their major
industry -- tourism. Its existence, furthermore, made the city eligible for
specific government funding that required matching funds.
http://www.housingtrustfund.org/faq.html 8/22/2000
• Frequently Asked Questions Page 3 of 4
25 very low-income
units which defy the
stereotype concerning
"public housing"
Q. What are the Sources of Funding for the Housing Trust Fund?
A. The initial $20 million dollar capitalization of the HTF is being raised
from a broad array of sources, including foundations, Silicon Valley
corporations, the County of Santa Clara and, to date, the Cities of San
Jose, Santa Clara and Milpitas.
Of course, twenty million dollars is not sufficient to fully address a
problem of this scope and this long in the making. It is, however, enough
to both improve the lives of thousands of families and, at the same time,
determine what improvements are required to optimize the effectiveness
of future funds invested in the trust.
Q. What Does It All Mean?
A. The Housing Trust Fund is the "DEAL MAKER."
• To bridge the eligibility gap in lending requirements for rental
housing and first time home buyers.
• To leverage other funding sources for non-profit organizations to
build additional affordable housing.
• To facilitate other housing funders such as Fannie Mae to be able to
undertake more innovative housing solutions and freeing additional
funds.
ABacktoTopA
The Housing Trust Fund of Santa Clara County
60 South Market Street, 10th Floor
San Jose, CA 95113-2336
Gisela B. Bushey
Project Director
Tel: 408/278-2215
Fax: 408/278-0280
E-mail: gbushek@cfsv.org
http://www.housingtrustfund.org/faq.html 8/22/2000
• .Frequently Asked Questions Page 4 of 4
n HTF
home
[Overview-1J(tensrulInto] a1ioiiJ[News Releases])I.-1C)t[ContactHTFI
[Steering Committee]UHTF Participantsl[Progress Meterl[Useful Link
housing photographs provided
courtesy of the
Housing Authority of the County of Santa Clara
site Design
by
MEDIA CONCEPTS GROUP
http://www.housingtrustfund.org/faq.html 8/22/2000
Town Council Minutes September 5, 2000
Redevelopment Agency Los Gatos, California
HOUSING TRUST FUND OF SANTA CLARA COUNTY/AFFORDABLE HOUSING (19.39)
Carl Guardino, Board Member of the Housing Trust of Santa Clara County, working for the Silicon
Valley Manufacturing Group, asked that the Town of Los Gatos join with other private and public sector
partners in a unique venture to help tackle the housing crisis that working families and residents face.
The Housing Trust was formed by more than severity community partners. If the trust could raise '0
million dollars in a two year cycle, it would be capable of leveraging 200 million in private development
funds. With that funding 5 thousand families can be helped: in the first time home buyers assistance:
affordable rental homes; and homeless shelters and assistance. Since most of the funding is in the form
of loans, those 5 thousand families pay back those funds so that others in the future can be helped. This
creates a permanent, ongoing source of funds. Fourteen months into the program the Trust has raised
12 million toward its goal, and there is confidence that the commitment can be met by the end of 16
months. The anticipation is that the program can be instituted within the year. He requested full support
from the Town with a $250,000 contribution, which with matching funds from HTF can be leveraged
to 5 million to fund a project. He confirmed that Los Gatos had requested participation in the program
and that the project be built within its own community.
Council consensus that staff return with a report identifying the housing projects and programs
currently earmarked for funding from the Town's $750,000 Redevelopment Set Aside fund, and report
to Council with a tentative agreement with the Housing Trust Fund on the portion of that fund that can
be contributed to the HTF. Mr. Guardino agreed to matching whatever amount the Town is able to
contribute from the Set Aside Fund.
Bud Lortz was recognized by Community Development Director, Paul Curtis, as the Town employee
who suggested maximizing the Town's contribution to this project and the method in which to
accomplish the most with the contributed funds for the Town and its residents.
HEARING
BROADWAY 69/DEMOLITION AND RECONSTRUCTION/RESIDENTIAL/APPEAL (22.15)
Mayor Blanton announced that this was the time and place so noted for public hearing to consider an
appeal of the decision of the Planning Commission approving a request to demolish a main structure
which includes a secondary dwelling unit and to construct a new single family residence on property
zoned R-1D:LHP. Architecture and Site Application S-00-15. Property Location: 69 Broadway.
Property Owner/Applicant: David and Laurie Zicovich. Appellant: Gary Ehlert.
The following people from the audience addressed this issue:
Gary Ehlert, 71 Broadway, spoke of the loss of his view from his home due to the design and placement
of this proposed project. He noted 80 Broadway where the view was saved. He spoke of 8
Pennsylvania which was redesigned to save the neighbor's view. He spoke of the General Plan which
expresses the need to preserve existing views for neighbors.
David Zicovich, 69 Broadway, spoke of the time and effort involved in designing this project to meet
the needs of all of the neighborhood. He noted that they had offered to move the house back to 29 feet.
Ray Davis, resident, spoke of the equity people have in their existing view.
TC: D I 1:W4090500 6